Summary Exam 1

A property valued at $72,000 has an assessed value of 50%. If the mill rate is 6 mills, what is the tax? 1. $216 2. $2,160 3. $1,800 4. $18,000

1. $216 - $72,000 x 0.5 =$36,000 x 0.006 = $216

Scenario A John and Mary Apton list their home for $152,000. There is an appurtenant easement to access a large lake which is deeded. A coal fired power plant is slated to open 5 miles from the property next year. An Environmental Impact Statement is due on March 7. Agent Pacheco presents an offer to the Aptons. It is a land contract for $142,000 with an 8% interest rate due and payable in 10 years. It is accepted. The offer is contingent on the environmental impact results. Closing is scheduled for June 1. Taxes are $3040, the commission is 6.5%, (buyer's agent commission is 2.8%), taxes and insurance are $675, recording fee is $25 The environmental impact statement showed the value of the property would not be impacted. Use a banker's calendar. Seller is responsible for the day of closing. With the information given in the scenario, what costs will the buyer need to bring to closing? 1. $700 ($675, $25) 2. $3740 ($3040 + $675, + $25) 3. $5951 ($3040/360 x 151= 1275 + 2.8% x $142,000 = $3976 + $675, + $25) 4. $4,676 (2.8% x $142,000, 675 25)

1. $700 ($675, $25) - $700 ($675, $25). The buyer does not pay any taxes until next year and does not pay the agent's commission.

Which of the following losses would most likely be covered by a home warranty? 1. A broken dishwasher 2. Cracks in the driveway 3. A broken window 4. Hail damage to the siding

1. A broken dishwasher - Home warranties usually cover internal systems and appliances.

An owner may properly refuse to rent to a prospective tenant because the prospective tenant is ______. 1. A drug addict with abusive behavior 2. A drug addict 3. A recovering alcoholic 4. An alcoholic

1. A drug addict with abusive behavior - Fair Housing: Drug addicts are not a protected class. If an owner has reason to believe the renter would be dangerous to others or the property, then he or she may choose not to rent to him or her.

A salesperson working with both the seller and the buyer would deal with the issues of dual agency by ______ . 1. Acting as a neutral facilitator for the transaction 2. Making sure the seller understands the contract 3. Advising one party and not the other 4. Making sure the buyer understands that he or she can ask for the seller to pay for closing costs

1. Acting as a neutral facilitator for the transaction

Zoning that requires that new structures match an existing architectural style is called _____ . 1. Aesthetic zoning 2. Cumulative zoning 3. Exclusionary zoning 4. Inclusionary zoning

1. Aesthetic zoning

Which of the following would NOT be classified as real property? 1. Chattels real 2. Easements 3. Mineral rights 4. Water rights

1. Chattels real - Personal property: Things that are tangible and movable; not real property.

Even if a loan applicant's current income seems adequate to qualify for a certain loan, the Equal Credit Opportunity Act allows a lender to refuse the loan as a high risk if the applicant's main source of income is ___________. 1. Commission sales 2. Pension fund 3. Social Security 4. Disability

1. Commission sales - When Evaluating Your Income, Creditors May Not...Refuse to consider reliable public assistance income the same way as other income; Discount income because of your sex or marital status. For example, a creditor cannot count a man's salary at 100 percent and a woman's at 75 percent. A creditor may not assume a woman of childbearing age will stop working to raise children; Discount or refuse to consider income because it comes from part-time employment, Social Security, pensions, or annuities; Refuse to consider reliable alimony, child support, or separate maintenance payments. A creditor may ask you for proof that you receive this income consistently.

A monthly property assessment bill for $46.09 was due in advance on the 1st of June and not paid by the seller (seller to pay the day of closing). At the closing on June 11, the proration (using a bankers calendar) would be shown as . 1. Debit the seller $16.90; Debit the buyer $29.19 2. Debit the seller $15.36; Debit the buyer $30.73 3. Debit the seller the full $46.09 as the bill is delinquent 4. Debit the seller $14.87; Debit the buyer $31.22

1. Debit the seller $16.90; Debit the buyer $29.19 - (30 days on the general part of exam) Seller owns ON the day of closing, unless problem states otherwise; $46.09 / 30 (days in June) = $1.536 x 11 = $16.89 (debit seller, days he or she owned the home), 1.536 x 19 = 29.19 (debit buyer, days he or she owned the home), Real Estate Mathematics Review; Prorations

Title is transferred with a ________. 1. Deed 2. Chain 3. Abstract 4. Suit to quiet title

1. Deed - To transfer title, you will need to prepare a deed, execute that deed, and record it.

A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to _______ . 1. Demand immediate payment of the entire note 2. Start foreclosure 3. Change the locks on the home 4. Charge an acceleration fee

1. Demand immediate payment of the entire note

Changing the zoning to a more restricted use, such as from multi-family to single -family, which will restrict the density, is called _____. 1. Downzoning 2. Upzoning 3. Rezoning 4. Hardzoning

1. Downzoning - Downzoning is changing the zoning to a more restricted use, such as from multi-family to single-family, which will restrict the density

One's legal interest in property—either freehold or non- freehold—is known as _____. 1. Estate 2. Deed 3. Title 4. Ownership

1. Estate

Broker Jane is working with Buyer Bob to purchase a home but has no signed agency agreement. Under the general law of agency this is _________. 1. Implied agency 2. Express agency 3. Illegal agency 4. Authorized agency

1. Implied agency - To assure that the broker will get paid, a written (express) contract is needed. Payment is not certain, to make it certain a contract should be in place. Express Contract: A contract in which all elements of a contract are specifically stated (offer, acceptance, consideration), and the terms are stated, as compared to an "implied" contract in which the existence of the contract is assumed by the circumstances.

What kind of zoning would require that a developer build 10% of the homes in a subdivision for low-income families? 1. Inclusionary 2. Exclusionary 3. Conservation 4. Cumulative

1. Inclusionary

A salesperson, when advertising a listed property _______ . 1. Must have his or her broker's name appear in the advertisement 2. May have his or her name only on the ad but must have the broker's phone # 3. May have his or her name only in the ad 4. Must have his or her broker's phone # only in the ad

1. Must have his or her broker's name appear in the advertisement

A broker is instructed not to show a property while the owner, who is caucasian, is away. While the owner is out of town, an African American couple requests to be shown the property. The broker should _______ . 1. Refuse to show the property 2. Ask HUD for an exception to the Fair Housing Act (Note: This is not a fair housing issue this is obeying owner's wishes) 3. Show the property 4. Inform the prospects that the home is no longer available to purchase

1. Refuse to show the property

An offer is terminated by ____ . 1. Rejection by the offeree 2. Rejection by the offeror 3. Request for an extension by the offeree 4. Revocation by the offeree

1. Rejection by the offeree

A competitive market analysis is MOST often used for _____ . 1. Setting a listing price 2. An appraisal 3. The future value f the property 4. Refinancing

1. Setting a listing price

A tenant dies and the heirs wish to move in to the property for the duration of the lease. Which of the following statements is true? 1. The heirs may occupy as sub-lessees only upon approval from the landlord. 2. The tenant's death terminates the lease. 3. The heirs may not occupy until the original lease expires. 4. The heirs may occupy under their right-of-survivorship.

1. The heirs may occupy as sub-lessees only upon approval from the landlord. - The lease does not terminate if the parties die or the property is sold. While responsible for the rent, the estate can not simply move anyone into the unit. The obligation to pay the rent does not also automatically extend the opportunity to, in essence, sub-lease the space.

The most favorable thing about a VA loan is that _____. 1. VA loans guarranty gives the veteran favorable financing terms because the lender is protected from loss 2. VA loans have a low down payment and low interest rate 3. VA appraisals are less stringent 4. Both #1 and #2 are correct

1. VA loans guarranty gives the veteran favorable financing terms because the lender is protected from loss

An owner wants to build a 200' x 300' foot addition to his home but the local ordinances restrict him from expanding on the south side. He should apply for a 1. Variance 2. Expansion permit 3. Nonconforming use permit 4. Special use permit

1. Variance - A variance is a requested deviation from the current land use rules or zoning ordinances, building codes or municipal codes.

Which of the following statements about mold is true? 1. When mold is found it's best to hire a certified mold specialist to test 2. Terminate the contract when mold is found 3. All mold must be removed 4. All molds are beneficial

1. When mold is found it's best to hire a certified mold specialist to test

Scenario B Randy and Jeff Minter hire Real Estate Broker Bonnie to list their home in St. Paul, a comfortable and elegant remodeled mountain home. It includes 3 bedrooms, 1 office, and 1 bath with slate bath tiles, granite countertops, stainless steel appliances, and maple hardwood throughout the open floor plan. Nearly 900 square feet upstairs is matched by a light garden-level basement. This home has two decks, a wood burning stove, and a quiet and energy-saving hot water radiant heater. The well pump was replaced, and a constant pressure water system installed in 2009. The septic has been maintained yearly without issue. This house sits on uniquely flat, usable 1.5 acres and is on the school bus route, which is plowed daily throughout the winter season. There is a tool shed, a 3-sided horse shed and a small corral. It is zoned for livestock. Local schools with bus service and daycare for young children are available within the canyon. The Minters list the home for $275,000 on June 15, and Broker Bonnie's commission is 6%. Taxes for last year have not been paid and are $2,300 yearly. Buyer's agent, Daniel Brooks, brings an offer for $267,000, which is accepted and will close on July 30. Buyer Benjamin will be getting a VA loan and will be putting 20% down. Buyer Benjamin has a resale furniture business, and he will store some of his saleable items on the property. Additionally, he plans to build a large storage shed for this purpose. The contract is contingent on the buyer's ability to get a building permit so he can build the needed structure on the property. His broker has added a contingency clause to the contract, which states the contract will terminate if the building permit is not granted by the city. How will the Closing Statement reflect the Buyer's tax liability they pay at closing if closing is July 30. 1. Credit the buyer $2,300 2. $0. The buyer has no tax liability at closing 3. Credit the buyer $2,841 4. Credit the buyer $3,641

2. $0. The buyer has no tax liability at closing - The Buyer has no tax liability at the time of closing. He or she will have to pay the full tax amount next year. The seller has to pay the buyer for the time he or she was in the home, (210 days. $2300 / 360 x 210) at closing.

An ad used a term that triggered full disclosure of loan terms. The ad stated . 1. Low down payment 2. $10,000 down 3. Payments lesser than rent 4. 8% APR

2. $10,000 down - Truth-In-Lending Act advertising rules are triggered if the amount or percentage of down payment, number of payments, period of repayment, or finance charges are included in any advertisement.

An owner listed the same property with 3 separate agents. The owner gave an Exclusive Right-to-Sell Listing to broker A, an Exclusive Agency/Brokerage Listing to broker B, and an Open Listing to broker C. Broker C sold the house and collected a commission while the other listings were still in effect. What are the rights of 'A' and 'B' as to a commission? 1. 'A' and 'B' are not entitled to any commission 2. 'A' and is entitled to a commission but B is not. 3. 'A' and 'B' both are entitled to a split of the commission from 'C'. 4. 'A' and 'B' are entitled to a second commission to be split between them

2. 'A' and is entitled to a commission but B is not. - Exclusive Right-to- Sell Listing Agreement entitles the listing broker to a commission regardless of who sells the property, while the Exclusive Agency/Brokerage Agreement reserves the right to the owner to sell himself without paying a commission under that agreement.

New sidewalks installed only on one particular street will probably be paid for by ____ . 1. The HOA 2. A special assessment 3. The buyer 4. The state

2. A special assessment

Bricks used to build a backyard patio become real property through the process of _____. 1. Severance 2. Annexation 3. A Bundle of Rights 4. Progression

2. Annexation - Annexation: An addition to property by the act of joining on thing to another, as in attaching personal property to real property and thereby creating a fixture.

Broker Steve can act for his client as a general agent ______. 1. Automatically when he has a signed listing agreement 2. By written instruction 3. But he cannot sign documents for the client 4. If he is a relative of the client

2. By written instruction - A special agent represents the principal in a particular activity or transaction—this is the relationship that most real estate agents have with their clients. The agents are contracted specifically to buy or sell a particular piece of property.

A potential seller wants you to list his luxury penthouse and informs you that there is also a storage unit above the penthouse that comes with the unit....how can you be sure it is part of the property before marketing the property? 1. Check the title company 2. Check the HOA docs 3. By just the seller's word 4. Check the deed

2. Check the HOA docs - If the condo has assigned storage units -- most likely the case -- then the storage unit is assigned, (and not owned by you). The rules that govern your usage, will be in your condo association docs. In most condominium developments, storage units are either common areas (which cannot be sold), or included as part of the condominium units themselves (and not separately saleable). The only way to know for sure what type of property your storage unit is, and whether you can sell it, is to study your development's governing documents; particularly the Declaration of Covenants, Conditions, and Easements (CC&Rs), the Condominium Map, and any other relevant rules and regulations.

A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to ________ . 1. Raise the interest rate 2. Demand immediate payment of the entire note 3. Require more payments per month 4. Cancel the note

2. Demand immediate payment of the entire note

A broker suggests that the sellers sign a listing agreement that gives the broker's office sole permission to sell the property for a period of 120 days. The sellers want to be able to sell the property themselves without paying a commission. In this situation, the listing agreement that will BEST protect both parties' interests is a(n) . 1. Net Listing 2. Exclusive Agency Listing 3. Exclusive Right-to-Sell Listing 4. Open Listing

2. Exclusive Agency Listing - Broker as Agent or Transaction: The broker has exclusive marketing rights except the seller may market and sell without service of the broker. If the seller is procuring cause and does not use the broker's service, the seller does not owe the broker a fee. Listings

If an older building cannot be air-conditioned, it is an example of _______. 1. Physical deterioration 2. Functional obsolescence 3. Economic obsolescence 4. Incurable depreciation

2. Functional obsolescence - Functional Obsolescence: A reduction in the usefulness or desirability of a building because of an outdated design feature, usually one that cannot be easily changed.

A major disadvantage of owning investment property might be ________ . 1. Frequent potential lawsuits 2. Lack of liquidity 3. Dealing with property managers 4. Increased tax liability

2. Lack of liquidity - Because it takes some time to convert real property into cash, the lack of liquidity is the main disadvantage of investing in real estate

A legal easement can be created by any of the following EXCEPT ___________. 1. Court order 2. Merger of the titles 3. A written agreement between the parties 4. Making use of another's land per some period of time

2. Merger of the titles -Easements can be created by a variety of methods, Express grant by deed, Statute, Will, , Prescription, Contract, Proprietary estoppel.

A single agent ______. 1. Must not counsel the party to the risks of the transaction 2. Represents one party in a transaction 3. Is the same as a Designated Broker 4. Has the same duties as a Transaction Broker

2. Represents one party in a transaction

The Clean Air Act 1. Requires review by the Army core of Engineers for any substantive changes to site plans on Commercial land sales. 2. Requires state plans to include land use and other controls necessary to achieve and maintain the federal ambient air quality standards. 3. Explicitly defines a national land use policy for protecting air quality. 4. Requires the Administrator of the US Environmental Protection Agency (EPA) to establish national ambient air quality standards for all air pollutants.

2. Requires state plans to include land use and other controls necessary to achieve and maintain the federal ambient air quality standards. - The Clean Air Act does not explicitly define a national land use policy for protecting air quality; it does require that state plans include land use and other controls necessary to achieve and maintain the federal ambient air quality standards.

A seller mentions to his agent that the previous owners of his property may have dumped hazardous waste on the site. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), who is liable for damages from the dumping prior to the sale of the property? 1. The previous owner, the seller and the new owner 2. Seller 3. The previous owner 4. The buyer

2. Seller - Under CERCLA, the seller and previous owner are both liable for damages from the dumping prior to the sale of the property. However, because he bought the property without proof that the previous owner was guilty of dumping hazardous waste then the previous owner will not be liable.

Before ratification of a contract for housing sale or lease, sellers and landlords must do all the following except _______. 1. Disclose any known information concerning lead-based paint or lead-based paint hazards. 2. Sellers must provide homebuyers a 30-day period to conduct a paint inspection or risk assessment for lead-based paint or lead-based paint hazards. 3. Give the "Protect Your Family From Lead In Your Home" pamphlet to buyer 4. Provide any records and reports on lead-based paint and/or lead-based paint hazards which are available to the seller or landlord

2. Sellers must provide homebuyers a 30-day period to conduct a paint inspection or risk assessment for lead-based paint or lead-based paint hazards. - Sellers must provide homebuyers a 10-day period to conduct a paint inspection or risk assessment for lead-based paint or lead-based paint hazards. Parties may mutually agree, in writing, to lengthen or shorten the time period for inspection. Homebuyers may waive this inspection opportunity.

A counterproposal _______________. 1. Is different than a Counteroffer 2. Terminates the original offer 3. Should not be signed by the seller 4. May not be withdrawn once it is offered

2. Terminates the original offer - A counterproposal terminates the original offer. It may be withdrawn prior to the seller signing.

Scenario B Randy and Jeff Minter hire Real Estate Broker Bonnie to list their home in St. Paul, a comfortable and elegant remodeled mountain home. It includes 3- bedrooms, 1 office, and 1 bath with slate bath tiles, granite countertops, stainless steel appliances, and maple hardwood throughout the open floor plan. Nearly 900 square feet upstairs is matched by a light, garden-level basement. This home has two decks, a wood burning stove, and a quiet and energy saving hot water radiant heater. The well pump was replaced, and a constant pressure water system was installed in 2009. The septic has been maintained yearly without issue. This house sits on a uniquely flat, usable 1.5 acres and is on the school bus route, which is plowed daily throughout the winter season. There is a tool shed, a 3 sided horse shed, and a small corral. It is zoned for livestock. Local schools with bus service and daycare for young children are available within the canyon. The Minters list the home for $275,000 on June 15, and Broker Bonnie's commission is 6%. Taxes for last year have not been paid and are $2300 yearly. Buyer's agent Daniel Brooks brings an offer for $267,000 which is accepted and will close on July 30th. Buyer Benjamin will be getting a VA loan and will be putting 20% down. Buyer Benjamin has a resale furniture business and he will store some of his saleable items on the property. Additionally, he plans to build a large storage shed for this purpose. The contract is contingent on the buyer's ability to get a building permit so he can build the needed structure on the property. His broker has added a contingency clause to the contract, which states the contract will terminate if the building permit is not granted by the city. The buyer has not heard back from the city about the building permit, and it's now July 29. What is the best action to take? 1. Nothing needs to be done at this time. 2. The buyer should request an extension of the contingency deadline and closing to give the city time to respond. 3. Broker Bonnie should call the city to find out what's going on and extend the contingency deadline. 4. The buyer should terminate the contract.

2. The buyer should request an extension of the contingency deadline and closing to give the city time to respond.

A salesperson would NOT be obligated to inform which of the following individuals of the fiduciary responsibilities of the brokerage firm under the law of agency? 1. The salesperson's licensed sales staff 2. The buyer's lender 3. Buyers' agents 4. Sub-Agents

2. The buyer's lender

When a Counterproposal is used _________ 1. The counterproposal has no time requirements for signing 2. The counterproposal must be signed by both the seller and buyer 3. The seller should sign both the contract and the counterproposal 4. The contract is signed by the seller

2. The counterproposal must be signed by both the seller and buyer -When a Counterproposal is used the original contract is not signed by the seller. The counterproposal must be signed and should be presented (attached) to the original contract. Note that in some states the contract will have a check-box identifying that a counter is being submitted. In this case the seller would sign the contract and the counter offer.

A conditional use permit would MOST LIKELY pertain to ______ . 1. Deed Restrictions 2. Zoning 3. Building codes 4. Covenants

2. Zoning - Conditional use permit (also known as a special use permit) usually granted to a property owner to allow a special use of property that is defined as a non-allowable use within that zone.

The last monthly interest payment on a mortgage was $825.77. If the interest rate was 7.2%, what was the balance due on the principal? 1. $118,764 2. $158,730 3. $137,628 4. $131,741

3. $137,628 - T-bar question where you have the PART (monthly interest x 12 to get the annual interest), divided by the annual interestRATE (7.2%) to get the TOTAL. $825.77 x 12 = Interest for 1 year. Int for 1 yr. divided by 7.2% = $137,628

What type of loan would require the borrower to make smaller monthly payments but a larger payoff at end of term? 1. Adjustable rate loan 2. Short term loan 3. Balloon loan 4. Interest only loan

3. Balloon loan - A balloon loan does not fully amortize over its term. Since it is not fully amortized, a balloon payment is required at the end of the term to repay the remaining principal balance of the loan.

Who is liable for misinformation given to a client? 1. The client 2. The salesperson only 3. Both the broker and salesperson 4. The broker only

3. Both the broker and salesperson

Scenario A John and Mary Apton list their home for $152,000. There is an appurtenant easement to access a large lake which is deeded. A coal-fired power plant is slated to open 5 miles from the property next year. An environmental impact statement is due on March 7. Agent Pacheco presents an offer to the Aptons. It is a land contract for $142,000 with an 8% interest rate due and payable in 10 years. It is accepted. The offer is contingent on the environmental impact results. Closing is scheduled for June 1. Annual taxes are $3,040, commission is 6.5%, (buyer's agent commission is 2.8%), taxes and insurance are $675, and the recording fee is $25 The environmental impact statement showed the value of the property would not be impacted. Use a banker's calendar. Seller is responsible for the day of closing. How does the Closing Statement reflect the buyer's tax liability? 1. Seller credit $3,040 2. Buyer credit $3,040 3. Buyer debit $0 4. Buyer debit $1,249

3. Buyer debit $0 - The buyer pays no taxes at closing (buyers have no tax liability), but will pay the full year in the following year. The buyer will receive a credit at closing for the time the seller lived in the home.

Depreciation is calculated based on the ______________. 1. Land 2. Land and cost of the building 3. Cost of the building only 4. Assessed valuation

3. Cost of the building only - Land does not depreciate.

Scenario B Randy and Jeff Minter hire Real Estate Broker Bonnie to list their home in St. Paul, a comfortable and elegant remodeled mountain home. It includes 3 bedrooms, 1 office, and 1 bath with slate bath tiles, granite countertops, stainless steel appliances, and maple hardwood throughout the open-floor plan. Nearly 900 square feet upstairs is matched by a light garden-level basement. This home has two decks, a wood burning stove, and a quiet and energy saving hot water radiant heater. The well pump was replaced and a constant pressure water system installed in 2009. The septic has been maintained yearly without issue. This house sits on uniquely flat, usable 1.5 acres and is on the school bus route, which is plowed daily throughout the winter season. There is a tool shed, a 3-sided horse shed, and a small corral. It is zoned for livestock. Local schools with bus service and daycare for young children are available within the canyon. The Minters list the home for $275,000 on June 15, and Broker Bonnie's commission is 6%. Taxes for last year have not been paid and are $2,300 yearly. Buyer's agent, Daniel Brooks, brings an offer for $267,000 which is accepted and will close on July 30. Buyer Benjamin will be getting a VA loan and will be putting 20% down. Buyer Benjamin has a resale furniture business. Additionally, he will store some of his saleable items on the property and he plans to build a large storage shed for this purpose. The contract is contingent on the buyer's ability to get a building permit so he can build the needed structure on the property. His broker has added a contingency clause to the contract, which states the contract will terminate if the building permit is not granted by the city. How will the Closing Statement reflect the seller's tax liability if closing is July 30? 1. $0 The seller has no tax liability 2. Credit the seller $1,341 3. Debit the seller $3,641 4. Credit the buyer $2,300

3. Debit the seller $3,641 -The seller has to pay the buyer for the time he was in the home, 210 days. $2,300 / 360 x 210, at closing. The seller will also need to pay the full last year's amount since it was unpaid. - The seller's tax liability at closing = $1,341 plus $2,300 = $3,641. $2,300 debit seller, credit broker, $1,341 debit seller, credit buyer.

Net loan proceeds will show up on the settlement sheet as _____. 1. Debit broker, credit buyer 2. Debit buyer 3. Debit title company (debit broker) 4. Debit seller

3. Debit title company (debit broker) - Net loan proceeds will show up on the settlement sheet as debit to the title company (broker column).

A contract in which all parties have signed but not closed is ___. 1. Pending 2. Unenforceable 3. Executory 4. Executed

3. Executory

Ownership of common stock in a corporation _____. 1. Comes with no voting rights 2. Limits an investor's liability to $100,000 3. Gives an interest classified as personal property 4. Gives an interest classified as real property

3. Gives an interest classified as personal property

An offer is accepted one day after the offer period expires. How could the offeror create a valid contract? 1. Novation 2. Rescission 3. Have the offeror sign a waiver of the offer period. 4. Accord and satisfaction

3. Have the offeror sign a waiver of the offer period. - Waiver: To give up or surrender a right voluntarily.

The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that _____ . 1. He should not buy this home 2. The home is no longer on the market 3. He is no longer the listing agent 4. He should call the seller

3. He is no longer the listing agent

In regulations regarding lead-based paint, HUD requires ______ . 1. Homeowners to test for its presence 2. Paint to be removed from surfaces prior to the sale 3. Known paint hazards to be disclosed 4. Only licensed contractors deal with the removal

3. Known paint hazards to be disclosed

Would it be acceptable for a community manager to post a rule that "Children may not ride bikes on the sidewalk"? 1. Yes, community rules are not governed by the Fair Housing Act, only leasing and sales activities are 2. Yes, the Fair Housing Act provides an exception to discrimination requirements when the safety of a child is concerned 3. No, it would only be permissible for the rule to state that no one could ride on the sidewalk 4. No, children are not protected by the Fair Housing Act

3. No, it would only be permissible for the rule to state that no one could ride on the sidewalk - It is illegal to treat households with children differently than households without children. The community rule stated here would be perfectly acceptable if rephrased this way: "No riding bicycles on the sidewalk."

Which of the following events would AUTOMATICALLY cancel a listing agreement? 1. Listing agent's death 2. Death in seller's family 3. Property owner's death 4. Property owner is unhappy with agent

3. Property owner's death

Scenario B Randy and Jeff Minter hire Real Estate Broker Bonnie to list their home in St. Paul, a comfortable and elegant remodeled mountain home. It includes 3 bedrooms, 1 office, and 1 bath with slate bath tiles, granite countertops, stainless steel appliances, and maple hardwood throughout the open floor plan. Nearly 900 square feet upstairs is matched by a light garden level basement. This home has two decks, a wood burning stove, and a quiet and energy saving hot water radiant heater. The well pump was replaced, and a constant pressure water system was installed in 2009. The septic has been maintained yearly without issue. This house sits on a uniquely flat, usable 1.5 acres and is on the school bus route, which is plowed daily throughout the winter season. There is a tool shed, a 3- sided horse shed, and a small corral. It is zoned for livestock. Local schools with bus service and daycare for young children are available within the canyon. The Minters list the home for $275,000 on June 15, and Broker Bonnie's commission is 6%. Taxes for last year have not been paid and are $2,300 yearly. Buyer's agent, Daniel Brooks, brings an offer for $267,000, which is accepted and will close on July 30. Buyer Benjamin will be getting a VA loan and will be putting 20% down. Buyer Benjamin has a resale furniture business, and he will store some of his saleable items on the property. Additionally, he plans to build a large storage shed for this purpose. The contract is contingent on the buyer's ability to get a building permit so he can build the needed structure on the property. His broker has added a contingency clause to the contract that states that the contract will terminate if the building permit is not granted by the city. The appraiser noted that an inspection of the property by a certified roofer showed that the roof is severely damaged and needs to be repaired/replaced. Which of the following is not an option for the buyer? 1. Terminate the contract. 2. Pay the full purchase price in cash. 3. Reduce the price and close as planned. 4. Ask the seller to replace or repair the roof prior to closing.

3. Reduce the price and close as planned. - Getting a VA loan will require repair or replacement prior to closing. Any appraisal done for VA secured financing will contain required provisions before the loan will be funded.

Scenario A John and Mary Apton list their home for $152,000. There is an appurtenant easement to access a large lake which is deeded. A coal-fired power plant is slated to open 5 miles from the property next year. An environmental impact statement is due on March 7. Agent Pacheco presents an offer to the Aptons. It is a land contract for $142,000, with an 8% interest rate due and payable in 10 years. It is accepted. The offer is contingent on the environmental impact results. Closing is for June 1. Taxes are $3,040, commission is 6.5%, (buyer's agent commission is 2.8%), taxes and insurance are $675, and the recording fee is $25. The environmental impact statement showed the value of the property would not be impacted. Use a banker's calendar. Seller is responsible for the day of closing. How does the Closing Statement reflect the Seller's tax liability? 1. Seller debit $1,266; Buyer credit $1,266 2. Buyer credit $3,040; Broker credit $0 3. Seller debit $1,275; Buyer credit $1,275 4. Seller debit $3,040; Buyer credit $3,040

3. Seller debit $1,275; Buyer credit $1,275 Since the buyer will pay the full year's taxes next year (taxes are paid in arrears), the seller needs to pay the buyer at closing for the time he or she lives in the home (from January 1 through closing).*** For the National Exam, remember that the seller usually pays the closing day. $3,040 / 360 x 151 = $1,275

Two brokers from different companies have gotten together to discuss what commission they will charge. This is prohibited by ______ . 1. Equal Credit Opportunity Act 2. Truth-In-Lending 3. The Sherman Anti-Trust Act 4. RESPA

3. The Sherman Anti-Trust Act - Common antitrust violations that are associated with the real estate industry include price fixing, boycotting competitors, and allocating customers or markets.

Marie dies intestate, and her property will transfer according to intestate succession. This means ______. 1. The courts will give the property to the descendent 2. The courts will give the property to her siblings 3. The courts will give the property based on state law 4. The courts will give the property to the state

3. The courts will give the property based on state law - Intestate Succession (without a will): Each state has a law of intestate succession that designates the persons who are to inherit the decedent's intestate estate. Intestacy or succession laws vary by state.

Broker James and Broker Laura agree in a phone call to each take listings on their respective sides of a creek that divides the Creekside Neighborhood. 1. As long as no customers price is affected then there is no violation. 2. This is an example of an acceptable verbal agreement between brokers. 3. This is market or customer-allocation and is a violation of the Sherman Act. 4. The brokers are engaging in bid-rigging and are violating the Clayton Act.

3. This is market or customer-allocation and is a violation of the Sherman Act. - Brokers should not agree to divide territories (and this is not limited to written agreements). So if there are two major brokerage firms in a smaller town divided by a river, they should not decide between them that one will take properties north of the river, while the other stays to the south. Any such agreement violates the antitrust laws.

Your sister signs a contract and gives you $10,000 as earnest money on a home you have listed. It being Saturday, you put the money in your personal account until Monday to cover some unexpected expenses. On Monday, you pick up your commission check from another closing and transfer the full $10,000 into your trust account. Which of the following best describes your situation? 1. Your actions were proper because all the funds were replaced and no one was hurt. 2. Your actions were proper because your sister would not mind as long as the funds were replaced. 3. Your actions were improper, you commingled funds, and your license can be revoked. 4. Your actions were improper, but there is no sanction because all the funds were replaced and no one was hurt.

3. Your actions were improper, you commingled funds, and your license can be revoked.

A commercial property whose building has been valued at $500,000 is being depreciated over a 39-year life. If the property is 11 years old, the depreciation that has been taken would be _____ . 1. $158,000 2. $12,820 3. $1,280 4. $141,025

4. $141,025 - To get the amount of depreciation for 11 years, divide the original cost of the building by 39. That will give you the annual depreciation. Then multiply that number by the number of years you want to depreciate (in the question it is 11 years) 500000 / 39 x 11 = $141,025.

Kevin is preparing a Comparative Market Analysis (CMA) on a commercial net leased office property that has 100% occupancy and income of $67,000, with expenses of $22,000 and a management fee of 5% of the gross income. The property is assessed by the municipality at $425,000. If Kevin considers a 9% rate of return to be reasonable for this income property, what would Kevin recommend as a listing price? 1. $500,000 2. $597,000 3. $744,444 4. $462,778

4. $462,778 - $67,000 - $22,000 - $3,350 (5% management fee) = $41,650 / 09 = $462,778 NOI (effective gross income - operating expenses) /cap rate = sales price $41,650/ .09 = $462,778

A property has a net income of $40,000.00. One appraiser decides to use a 12 % capitalization rate, while a second appraiser uses a 10% rate. Use of the higher rate results in . 1. No change in the appraised value 2. A $66,667 increase in appraised value 3. A 2% increase in appraised value 4. A $66,667 decrease in appraised value

4. A $66,667 decrease in appraised value - The CAP rate measures the risk involved in an investment; thus, the higher the risk, the higher the CAP rate. the lower the risk, the lower the CAP rate. Noi / R = V 1. $40,000/ 12% = $ 333,333 2. $40,000/ 10% = $400,000 $400,000 - $333,333 = $66,667

The right to use property belonging to another for a specific reason is called ______. 1. Negative easement 2. Easement in right 3. Prescriptive easement 4. Affirmative Easement

4. Affirmative Easement

A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship? 1. Conflicted 2. Illegal 3. Dual Agency 4. Agency coupled with an interest

4. Agency coupled with an interest

_____ must be disclosed if they are known. 1. Radon 2. Asbestos 3. Any environmental hazard 4. All of the above

4. All of the above

Functional obsolescence can be caused by _____ . 1. Toxic mold found within the property 2. Circumstances outside the property 3. A zoning change 4. An over-improvement of the property

4. An over-improvement of the property

According to the Truth in Lending Act, if a lender discloses ______in their advertising, these terms will "trigger" additional lender disclosures, most notably the annual percentage rate (APR) will also be required. 1. Down payment 2. Interest Rate 3. Term of loan 4. Any of the above

4. Any of the above

A monthly amortized loan payment differs from the prior month's payment in that the prior month's payment ______. 1. Was a greater amount 2. Was a lesser amount 3. Applied more money to principal 4. Applied more money to interest

4. Applied more money to interest

Which party to a sales contract always has a right to enforce the contract by specific performance? 1. Buyer 2. Broker 3. Seller 4. Both Buyer and Seller

4. Both Buyer and Seller - Both Buyer and Seller may force the other to perform or sue in court for damages or both for failing to perform in a contract.

Which of the following statements about both the Mortgage and Deed of Trust is FALSE? 1. Both are considered liens on the property until the loan is paid off 2. Both secure the promissory note with the value of the real estate. 3. Both pledge the property to the lender in case the borrower defaults on the debt 4. Both are held by the lender, with the lender giving most of the property rights to the borrower

4. Both are held by the lender, with the lender giving most of the property rights to the borrower - By using a Deed of Trust, the borrower and lender agree that title to the property will be held by a trustee until the loan is paid off. Most of the rights and responsibilities of owning the property are given to the borrower. In a foreclosure, the trustee is allowed to sell the property and give the proceeds to the lender.

Real estate property taxes are based on a banker's year and are payable in arrears. The taxes were $1,214.00 for the year. The closing is on April 1. The seller is ______. 1. Credited $302.67 2. Debited, and the buyer is credited $911.33 3. Debited $911.33 4. Debited, and the buyer is credited $306.67

4. Debited, and the buyer is credited $306.67 - The buyer pays the entire tax bill at the end of the year. The seller will pay his prorated portion to the buyer at closing. Seller owns closing day 1214/360 = 3.37 x 91 = 306.67 (on a calculator, the answer is 1214/360 = 3.372222... x 91 = 306.87)

The previous tenant of your investment listing died of AIDS. Should you disclose this to potential buyers, and why? 1. Yes, This is a material fact under full disclosure contract requirements. 2. Yes, state laws require the disclosure 3. No, Illegal acts need not be disclosed. 4. In most states, Fiduciary Duty of Confidentiality precludes you from disclosing non-material facts (however some states do require disclosure).

4. In most states, Fiduciary Duty of Confidentiality precludes you from disclosing non-material facts (however some states do require disclosure).

The description, "beginning with a corner at the intersection of two stone walls near an old oak tree" can be found in what method of describing land? 1. Government Survey 2. Platt map 3. Rectangular Survey System 4. Metes and bounds

4. Metes and bounds - Metes and bounds describes the limits or boundaries of a tract of land as identified by natural landmarks, such as rivers, or by man-made structures, such as roads, or by stakes or other markers. A principal legal type of land description in the United States, metes-and-bounds descriptions are commonly used wherever survey areas are irregular in size and shape.

The increased value resulting from the consolidation of 2 adjacent lots into 1 larger lot is ______. 1. Assemblage 2. Substitution 3. Coordination 4. Plottage

4. Plottage -The combining of two lots to increase the value is known as assemblage. The resulted value added is called plottage value.

If conditions for purchase are included in a deed and these conditions are violated, what is the penalty? 1. The tenant must vacate the property 2. The owner must file a court action 3. A fine will be issued 4. Return of the property to the original owner

4. Return of the property to the original owner A deed restriction is a type of private agreement restricting the use of real estate. Such restrictions are usually listed within the written deed document relating to the property, and should be noted if the property is to be sold or transferred. A deed restriction can also place limitations on the title to the property, such as when a seller wishes to sell their property according specific conditions. Although deed restrictions can often be helpful for numerous parties, there are times when they cannot be enforced. These can include situations where:

Subdivision laws come from ______ . 1. U.S. Constitution 2. The planning committee 3. Federal laws and regulations 4. State law and municipal ordinances

4. State law and municipal ordinances

Scenario A John and Mary Apton list their home for $152,000. There is an appurtenant easement to access a large lake which is deeded. A coal fired power plant is slated to open 5 miles from the property next year. An environmental impact statement is due on March 7. Agent Pacheco presents an offer to the Aptons. It is a land contract for $142,000 with an 8% interest rate due and payable in 10 years. It is accepted. The offer is contingent on the environmental impact results. The environmental impact report showed that the home value would likely decrease due to the opening of the coal fired power plant. How does this affect the contract? 1. The contract would be void. 2. The contract is automatically terminated. 3. The sellers must reduce the offer price. 4. The buyers may proceed.

4. The buyers may proceed. -A real estate contingency contract is the addition of language pertaining to the seller's and the buyer's needs in order to complete the sale. A sales contract presented by a real estate agent is often amended to include contingency agreements from one or both parties to complete the sale. Signatures from all parties and real estate agents are required to make the sales and contingency contracts legally binding documents.

A property has a first mortgage for $100,000, and the property taxes of $4,500 have NOT been paid. Therefore, which of the following statements is true? 1. A deed of trust or mortgage is in first position, then property taxes, then mechanic's lien. 2. The property tax lien will be in second position after IRS taxes. 3. The property tax lien will be in second position after mechanic's liens. 4. The property tax lien will be in first position.

4. The property tax lien will be in first position.

Betty is selling her home and a title defect is found from the previous owner. Betty is not responsible so she has a ____________ deed. 1. General Warranty 2. Special Warranty 3. Quit claim 4. Grant

special warranty -The special warranty deed limits the grantor's liability for title defects arising after the property is transferred. When property is transferred using a special warranty deed, if a title defect is found, the grantor is only responsible for costs related to defects that came into existence while he owned the property. If it is discovered that the defects already existed when the grantor purchased the property, the grantor is not liable for costs or damages. The special warranty deed also releases the grantor from any responsibility for defects that arise after the property is transferred to the purchaser.